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SCHEDULE 14A
(RULE 14a-101)14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrantregistrant [X]
Filed by a Partyparty other than the Registrantregistrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statementproxy statement. [ ] Confidential, for Useuse of the
Commission Onlyonly (as permitted by
Rule 14a-6(e)(2)).
[ ] Definitive Proxy Statementproxy statement.
[ ] Definitive Additional Materialsadditional materials.
[ ] Soliciting Material Pursuantmaterial pursuant to Rule 14a-11(c) or Rule 14a-1214a-12.
Madison Gas and Electric Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other thanOther Than the Registrant)
Payment of Filing Fee (Checkfiling fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set(set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:Previously Paid:
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(2) Form, scheduleSchedule or registration statement no.Registration Statement No.:
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(3) Filing party:Party:
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(4) Date filed:Filed:
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MADISON GAS AND ELECTRIC COMPANY
[MG&E LOGO]
------------------------------------------------
PROXY STATEMENT
------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1999
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MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
March 24, 199931, 2000
Dear MGE Shareholder:
The directors and officers of the Company join me in extending a cordial
invitationIt is our pleasure to invite you to attend our 19992000 Annual Meeting of
Shareholders which willto be held on Tuesday, May 4, 1999,9, 2000, at 11:00 a.m., local time, in
the Exhibition Hall of the Dane County Exposition Center, 1919 Expo Way,
Madison, Wisconsin (see the map on next page)the back cover).
Our accompanying Proxy Statement requests approval ofAt the meeting we will ask you to consider and vote upon the election of
a
slate of nominees forthree Class II directors of Class I to hold office until 2002 and
approval of an amendment to the Company's Bylaws.
At the Meeting we2003. We will discuss last year's
operations,performance, comment on items of interest to you and theMadison Gas and Electric
Company (MGE), and give you an opportunityrespond to askyour questions. Following the Meeting, our officers, directors, and other employeesmeeting, we will be
available to answer any additional questions you may have.
YOUR VOTE IS IMPORTANT. IWE ENCOURAGE YOU TO SIGN AND DATE YOUR PROXY PROMPTLYCARD
AND MAIL IT BACK TO US PROMPTLY even if you plan to attend the Meeting.meeting. You may
revoke your proxy at the Meetingmeeting and vote your shares in person if you wish.
I hopeWe look forward to seeing you will be able to attend.at the meeting.
Very truly yours,
DAVID[DAVID C. MEBANEMEBANE]
DAVID C. MEBANE
Chairman of the Board
[GARY J. WOLTER]
GARY J. WOLTER
President and Chief Executive Officer
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NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
OF MADISON GAS AND ELECTRIC COMPANY
DATE: Tuesday, May 9, 2000
TIME: 11:00 a.m., local time
PLACE:Exhibition Hall
Dane County Exposition Center
1919 Expo Way
Madison, Wisconsin
PURPOSE:
- - To elect three Class II directors to terms of office expiring at the 2003
Annual Meeting of Shareholders; and
- - To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 1, 2000, are
entitled to vote at the meeting.
The matters to be acted upon at the meeting are described in the
accompanying proxy statement.
By order of the Board of Directors
MARK A. FRANKEL
Vice President, General Counsel,
and Secretary
March 31, 2000
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TABLE OF CONTENTS
PAGE
----
MADISON GAS AND ELECTRIC COMPANY............................ 1
THE ANNUAL MEETING.......................................... 1
Attending the Annual Meeting.............................. 1
This Proxy Statement...................................... 1
Voting.................................................... 2
Street Name Holders....................................... 2
Record Holders............................................ 2
Matters to Be Considered.................................. 2
Quorum Requirement........................................ 2
The Vote Necessary for Action to Be Taken................. 3
Revocation of Proxies..................................... 3
ELECTION OF DIRECTORS....................................... 3
BENEFICIAL OWNERSHIP OF COMMON STOCK........................ 5
MEETINGS AND COMMITTEES OF THE BOARD........................ 6
DIRECTOR COMPENSATION....................................... 7
EXECUTIVE COMPENSATION...................................... 7
Summary Compensation Table................................ 7
Report on Executive Compensation.......................... 8
Company Performance....................................... 11
Pension Plan and Supplemental Retirement Plan............. 13
Deferred Compensation Plan................................ 14
Severance Plans........................................... 14
OTHER INFORMATION........................................... 15
Expenses of Solicitation.................................. 15
Shareholder Proposals for the 2001 Annual Meeting......... 15
Other Matters............................................. 16
MAP IS ON BACK COVER
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MADISON GAS AND ELECTRIC COMPANY
-------------------------
MGE is an investor-owned public utility with executive offices located at
133 South Blair Street, Madison, Wisconsin 53703. Our telephone number is (608)
252-7000. Our Web site is located at www.mge.com on the Internet.
THE ANNUAL MEETING
ATTENDING THE ANNUAL MEETING
Our annual meeting will be held on Tuesday, May 9, 2000, at 11:00 a.m. in
the Exhibition Hall of the Dane County Exposition Center, 1919 Expo Way,
Madison, Wisconsin. If you plan to attend the Meeting in person,meeting, please fill out the
enclosed reservation form and return it with your proxy card so that we may have an
indication of the number of shareholders planning to attend the Meeting.meeting. If your
shares are held through a broker or its nominee and you would like to attend the
meeting, please see "Voting -- Street Name Holders" below.
THIS PROXY STATEMENT
We sent you our proxy materials because our Board of Directors is
soliciting your proxy to vote your shares at the meeting. If you own MGE common
stock in more than one account, such as individually and also jointly with your
spouse, you may receive more than one set of these proxy materials. To assist us
in saving money and to provide you with better shareholder services, we
encourage you to have any questions, please feel free to callall your accounts registered in the same name and address.
You may do this by contacting our Shareholder Services Department toll-free number. Callat
1-800-356-6423 if you are calling from within the Continental United States and at (608)
252-4744 inif calling from the Madison area.
Map
Note: Enter the Dane County Expo Center grounds through the Main Gate off of
Rimrock Road (see inset map).
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MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 4, 1999, 11:00 A.M.
The 1999 Annual Meeting of Shareholders of Madison Gas and Electric Company
will be held in Madison, Wisconsin, in the Exhibition Hall of the Dane County
Exposition Center, 1919 Expo Way, Madison, Wisconsin, on Tuesday, May 4, 1999,
at 11:00 a.m., local time, for the purposes of:
(1) Electing three Class I directorsOn March 31, 2000, we began mailing these proxy materials to hold office until the Annual
Meeting of Shareholders in 2002 and until their successors have been
elected and qualified.
(2) Considering and voting upon a proposed amendment to the Company's
Bylaws to require any employee director of the Company to remain employed
full-time in order to continue service as a director.
(3) Transacting such other business as may properly come before the
Meeting.
Only those shareholders of Common Stock of record at the close of business
on March 1, 1999, are entitled to vote at the Meeting. All shareholders are
requested to be present at the Meeting in person or by proxy. Enclosed is a
proxy.
Your attention is directed to the Company's Proxy Statement on the
following pages.
By order of the Board of Directors
GARY J. WOLTER, Secretary
March 24, 1999
-------------------------
It is important to you and the Company that your shares be represented at
the Meeting. Even if you plan to attend the Meeting in person, you are requested
to sign, date, and mail the enclosed proxy promptly -- regardless of the size of
your stock holding.
The signature on the proxy should correspond exactly with the name of the
shareholder as it appears on the proxy. Where stock is registered in the names
of two or more persons, all such persons should sign the proxy.
If the proxy is signed as attorney, officer, personal representative,
administrator, trustee, guardian, or similar capacity, please indicate full
title as such.
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MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
PROXY STATEMENT
To the Shareholders of
MADISON GAS AND ELECTRIC COMPANY:
The Proxy Statement and accompanying proxy, mailed on or about March 24,
1999, are furnished as a part of the solicitation of proxies by the Board of
Directors (the "Board") of Madison Gas and Electric Company (the "Company"), to
be voted at the 1999 Annual Meeting of Shareholders to be held in the Exhibition
Hall of the Dane County Exposition Center, 1919 Expo Way, Madison, Wisconsin, on
Tuesday, May 4, 1999, at 11:00 a.m., local time, for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. A shareholder who
executes a proxy may revoke it at any time before it is voted. A proxy may be
revoked by written notice to the Company, execution of a subsequent proxy which
is voted at the 1999 Annual Meeting, or attendance at the Meeting and voting in
person. Attendance at the Meeting will not automatically revoke a proxy.
As of March 1, 1999, the Company had outstanding 16,079,718 shares of
Common Stock. The Common Stock constitutes the only class of securities entitled
to vote at the Meeting. Only those
shareholders of record at the close of business on March 1, 1999, are2000. On the record
date of March 1, 2000, there were 16,192,272 shares of common stock outstanding
and entitled to vote at the Meeting.vote.
At the 1985 Annual Meeting of Shareholders, the shareholders of the Company approved an
amendment to the Company's Restatedour Articles of Incorporation (the "Restated
Articles") limiting the voting power of any
shareholder who acquires more than 10 percent of the Company'sour outstanding voting stock.
To theour knowledge, of the
Company, this limitation does not currently apply to any shareholder.
Accordingly, atAt the present time, oneeach share of Common Stockcommon stock will be entitled to one vote.vote at
the meeting. For those shareholders who are participants in the Company's Investorsour Dividend
Reinvestment and Direct Stock Purchase Plan (Investors Plus Plan,Plan), the shares
you have accumulated in the Planplan are held by the Administrator of the Planadministrator under the nominee
name of Whimm & Co., and those shares, including your reinvestment shares, will
be voted in accordance with theyour direction given on your proxy.
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VOTING
STREET NAME HOLDERS
If you own shares through a broker, the registered holder of those shares
is the broker or its nominee. If you receive our proxy materials from your
broker, you should vote your shares by following the procedures specified by
your broker. Your broker will tabulate the votes it has received and submit a
proxy card to us reflecting the votes of the street name holders. If you plan to
attend the annual meeting and vote your street name shares in person, you should
contact your broker to obtain a broker's proxy card and MGE's Shareholder
Services to make a reservation for the meeting.
RECORD HOLDERS
You can vote in person at the meeting or by proxy. VOTING INFORMATION
A shareholder may, with respectBy giving us your proxy,
you are authorizing the individuals named on our proxy card (the proxies) to
vote your shares in the election of directors, (i) votemanner you indicate. You may:
- Vote for the election of all namedthree of our director nominees;
- Withhold authority to vote for all three of the director nominees; or
- Vote for the election of one or two of our director nominees (ii)and withhold
authority to vote for all named director nominees, or (iii) vote for the election of all such nominees
other than any nominee with respect to whom the shareholder withholds authority
to votenominee(s) by so indicating on the proxy. A shareholder may, with respect to the
proposal to amend the Company's Bylaws, (i) vote for the proposal, (ii) vote
against the proposal,proxy
card.
If you sign and return our proxy card without indicating your instructions
and without indicating expressly you are not voting some or (iii) abstain from voting on the proposal. Proxies
properly executed and received by the Company at or prior to the Meeting and not
revoked will be voted as directed therein. In the absenceall of a specific
direction from a shareholder, proxiesyour shares,
your shares will be voted for the election of all three director nominees.
The signature on the named director nominees and forproxy card should correspond exactly with the proposal to amendname of
the Company's Bylaws.shareholder as it appears on the proxy card. Where stock is registered in
the name of two or more persons, all such persons should sign the proxy. If you
sign a proxy indicates that allcard as an attorney, officer, personal representative,
administrator, trustee, guardian, or similar capacity, please indicate your full
title in such capacity.
MATTERS TO BE CONSIDERED
At the meeting, shareholders will:
- Elect three Class II directors to terms of office expiring at the 2003
Annual Meeting of Shareholders; and
- Transact any other business properly raised.
QUORUM REQUIREMENT
A quorum is necessary to hold a portionvalid meeting of shareholders. If
shareholders entitled to cast at least a majority of the votes represented by such proxy are
not being voted, such nonvotes will not be considered as votes cast with respect
to such matter, although such shares may be considered present and entitled to vote
for other purposes andat the meeting are present in person or by proxy, a quorum will count for purposes of determiningexist. In order
to assure the presence of a quorum, please sign and return your proxy card
promptly in the enclosed postage-paid envelope, even if you plan to attend the
meeting. Abstentions and broker nonvotes are counted as present for establishing
a quorum. A broker nonvote occurs when a broker
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votes on some matter on the proxy card, but not on others because the broker
does not have the authority to do so.
THE VOTE NECESSARY FOR ACTION TO BE TAKEN
If a quorum is present, the three persons receiving the greatest number of
votes will be elected to serve as Class III directors. Accordingly, withholding
authority to vote for a director and nonvotes with respect to the election of
directors will not affect the outcome of the election of directors.
REVOCATION OF PROXIES
If you are a quorumregistered holder of common stock, you may revoke your proxy
by giving written revocation to MGE's Corporate Secretary at any time before
your proxy is presentvoted, by executing a later-dated proxy card which is voted at the
meeting, or by attending the meeting and voting your shares in person. If your
shares are held by a broker, you must contact your broker to revoke your proxy.
Attendance at the number of votes cast favoring the proposal to amend the
Company's Bylaws exceeds the number of votes cast opposing the proposal, the
proposal will be approved. Accordingly, abstentions and nonvotes with respect to
the proposal to amend the Company's Bylawsmeeting will not affect the outcome of the
vote on that proposal.automatically revoke your proxy.
ELECTION OF DIRECTORS
As described below, upon the retirement of Messrs. Stark and Vondrasek at
the 1999 Annual Meeting, theThe Board of Directors will consistconsists of eightnine directors divided into three
classes, with oneeach class having two directors and two classes having three directors, with one class being elected each
year for a term of three years.
Accordingly, it is proposed thatMessrs. Swanson, Nevin, and Wolter are currently Class II directors whose
terms expire at the three nominees listed below be
elected2000 Annual Meeting. They have been nominated for reelection
to serve as Class III directors for three-year terms, to expire at the 20022003
Annual Meeting and upon the election and qualification of their successors.
Mrs. Biddick, Ms. Millner, and Mr. Mebane are currently Class I directors
whose terms expire at the 1999 Annual Meeting and who have been nominated for
reelection.
Each of the nominees has indicated a willingness to serve if elected, and
the Board of Directors has no reason to believe that any nominee will be unavailable. If any
of the nomineesnominee should become unable to serve, it is presently intended that the proxies solicited herebyyour proxy
will be voted for a substitute nominee designated by the Board of Directors.Board.
Mrs. Biddick is currently a Class I director whose term would normally
expire at the 2002 Annual Meeting. Under the Company'sMGE director retirement guidelines,
for directors, non-officernonofficer directors must retire from the Board no later than the Annual Meetingannual meeting
following their 73(rd)73rd birthday. Mr. Stark, age 73, who has been a director for 14 years, has informed the
Board of his intentionTherefore, Mrs. Biddick would be required to
retire from the Board and its committees at the 1999
Annual Meeting. Mr. Stark is currently a Class III director whose term would
expire at the 2001 Annual Meeting. Mr. Vondrasek, age 70, a director for 17
years, has also informed the Board of his intention to retire from the Board and
its committees at the 1999 Annual Meeting. Mr. Vondrasek is currently a Class II
director whose term would expire at the 2000 Annual Meeting. Shareholders are
not beingmeeting. The Board wishes to make an exception to the
guidelines and has asked Mrs. Biddick to elect nomineescontinue to fillserve as a Class I director
until the vacancies created byterm to which she has been elected expires at the retirement of Mr. Stark and Mr. Vondrasek.annual meeting in
2002 or until her earlier resignation.
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The following table sets forth the names ofcertain information about the nominees and
the current directors who will continue in office after the Meeting, their ages, information
as to their business experience for the last five years (unless otherwise
noted), and the year they first became directors of the Company.
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DIRECTOR
NAMES (AGES) AND BUSINESS EXPERIENCE SINCE
------------------------------------ --------
Nominees (Class I)II) -- Term Expiring in 1999
JEAN MANCHESTER BIDDICK (72), Madison, Wisconsin............ 1982
Retired Chief Executive Officer of Neesvig's Inc., a
wholesale meat company, with which she was associated for
more than 27 years.
DAVID C. MEBANE (65), Madison, Wisconsin.................... 1984
Chairman of the Board of Directors, President, and Chief
Executive Officer of the Company, of which he has been an
officer since 1980; also director of First Federal Capital
Corp., a bank holding company.
REGINA M. MILLNER (55), Madison, Wisconsin.................. 1996
Attorney, analyst and broker for more than 20 years; Her
firm, RMillner & Co., S.C., specializes in complex real
estate projects and provides consulting services for
private clients and governmental agencies; also a director
of Wisconsin State Equity Corporation.
Members of the Board of Directors Continuing in Office
Class II -- Term Expiring in 20002003
H. LEE SWANSON (61)(62), Cross Plains, Wisconsin................ 1988
Chief Executive Officer, President, and Director of the
State Bank of Cross Plains, with which he has been
associated for more than 3334 years; also director of Chorus
Communications Group MidPlains Telephone Company, and the Federal Home Loan Bank of
Chicago.
JOHN R. NEVIN (56)(57), Madison, Wisconsin...................... 1998
Associate Dean of Master's Programs; Director, Grainger
Center for DistributionSupply Chain Management, and Grainger Wisconsin
Distinguished Professor, School of Business, University of
Wisconsin-Madison, where he has been a faculty member for
2829 years.
GARY J. WOLTER (45), Madison, Wisconsin..................... 2000
President and Chief Executive Officer of MGE, of which he
has been an officer since 1989 and an employee since 1984.
Members of the Board of Directors Continuing in Office
Class III -- Term Expiring in 2001
RICHARD E. BLANEY (62)(63), Madison, Wisconsin.................. 1974
Retired President of Richard Blaney Seeds Inc., sellers of
hybrid seed corn, with which he was associated for more
than 9 years.
FREDERIC E. MOHS (62)(63), Madison, Wisconsin................... 1975
Partner in the law firm of Mohs, MacDonald, Widder &
Paradise, of which he has been a member since 1968.
F. CURTIS HASTINGS (53)(54), Madison, Wisconsin................. 1999
President of J. H. Findorff & Son, Inc., and Findorff,
Inc., commercial and industrial general contractors and
design builders, with which he has been associated for 2829
years; also director of National Guardian Life Insurance
Co.
Class I -- Term Expiring in 2002
JEAN M. BIDDICK (73), Madison, Wisconsin.................... 1982
Retired Chief Executive Officer of Neesvig's Inc., a
wholesale meat company, with which she was associated for
more than 27 years.
DAVID C. MEBANE (66), Madison, Wisconsin.................... 1984
Chairman of the Board of Directors of MGE, of which he has
been an officer since 1980; also director of First Federal
Capital Corp., a bank holding company.
REGINA M. MILLNER (56), Madison, Wisconsin.................. 1996
Attorney, analyst and broker for more than 21 years; her
firm, RMillner & Co., S.C., specializes in complex real
estate projects and provides consulting services for
private clients and governmental agencies; also director
of Meriter Hospital and Health Services.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table lists the beneficial ownership of Common Stockcommon stock of each
director and nominee, the individuals named in the Summary Compensation Table,summary compensation table,
the directors and executive officers as a group, and each person known by the
CompanyMGE to
be the beneficial owner of more than 5 percent of the outstanding shares of
Common Stock.common stock. In each case the indicated owner has sole voting power and sole
investment power with respect to the shares shown except as noted.
PERCENT OF
NUMBER OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED COMMON STOCK
---- ------------------ ------------
Jean Manchester Biddick................ 3,936M. Biddick....................... 4,189 *
Richard E. Blaney...................... 1,414Blaney..................... 1,505 *
Terry A. Hanson........................ 2,477(1)Hanson....................... 3,294(1)(2) *
F. Curtis Hastings..................... 1,088Hastings.................... 1,702 *
Thomas R. Krull........................ 10,178(2)Krull....................... 11,954(1)(2) *
David C. Mebane........................ 8,947(1)Mebane....................... 9,888(1)(2) *
Regina M. Millner......................Millner..................... 924 *
Frederic E. Mohs....................... 1,872(3)Mohs...................... 1,891(3) *
John R. Nevin..........................Nevin......................... 900 *
H. Lee Swanson.........................Swanson........................ 3,150 *
Mark C. Williamson..................... 2,614(1)Williamson.................... 3,456(1)(2) *
Gary J. Wolter......................... 3,888(1)Wolter........................ 4,887(1)(2) *
All directors and executive officers
as a group (18)........................ 52,979(2)(19).................... 59,716(2) *
Marshall & Ilsley Corporation.......... 910,798(4) 5.66Corporation......... 889,625(4) 5.53
770 North Water Street
Milwaukee, Wisconsin 53202
- -------------------------
* Less than 1 percent.
(1) Messrs. Hanson, Krull, Mebane, Williamson, and Wolter are directors of
Madison Gas and Electric Company Foundation, Inc., and as such have shared
voting and investment power in an additional 12,000 shares of Common Stockcommon stock
held thereby.by the Foundation.
(2) Includes Common Stockcommon stock held under the two Employee Stock Ownership Plans of
the Companyemployee stock ownership plans for
the account of executive officers of the CompanyMGE with respect to which such persons
have sole voting but no investment power: Mr. Hanson, 425453 shares; Mr. Krull,
6,3447,205 shares; Mr. Mebane, 5,4535,804 shares; Mr. Williamson, 1415 shares; Mr.
Wolter, 8894 shares; and directors and executive officers as a group, 18,30216,624
shares.
(3) Includes 628 shares of Common Stockcommon stock with respect to which Mr. Mohs is
trustee of a trust for the benefit of his children.
(4) Marshall & Ilsley Trust Company is the Trustee of the Company's Employee
Stock Ownership Plans.MGE employee stock
ownership plans. Marshall & Ilsley Corporation (M&I), as a parent holding
company, filed a Schedule 13G to report beneficial ownership by it and four
subsidiaries of shares of Common Stock.common stock. Based on information contained in
the Schedule 13G, this includes shares as to which M&I has or shares voting
and investment power as follows: sole voting power as to 87,144124,129 shares;
shared voting power as to 823,501765,271 shares (as to which beneficial ownership
is disclaimed as to 782,535756,909 shares held in one or more employee benefit
plans); sole investment power as to 82,546127,679 shares; and shared investment
power as to 828,252761,946 shares (as to which beneficial ownership is disclaimed
as to 782,535756,909 shares held in one or more employee benefit plans).
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MEETINGS AND COMMITTEES OF THE BOARD
COMMITTEES
The CompanyMGE has an Audit Committee, a Compensation Committee, an Executive
Committee, and a Personnel Committee.
DuringThe following table sets forth the year ended December 31, 1998, a totalmembership of 11 meetings of theeach committee:
AUDIT COMPENSATION EXECUTIVE PERSONNEL
NAME COMMITTEE COMMITTEE COMMITTEE COMMITTEE
---- --------- ------------ --------- ---------
Jean M. Biddick................................... X X X
Richard E. Blaney................................. X X X
F. Curtis Hastings................................ X X
David C. Mebane................................... X X
Regina M. Millner................................. X X
Frederic E. Mohs.................................. X X* X X
John R. Nevin..................................... X X
H. Lee Swanson.................................... X* X X
- -------------------------
* Chairperson
The Board of Directors were held.met 12 times during 1999. All of the directors attended in excess ofat
least 75 percent of the aggregate number of these meetings and (if they were members of the
Audit, Compensation, Executive, or Personnel Committee) the meetings of the Audit, Compensation, Executive,Board and Personnel Committees.
In 1998 directors who were not employees of the
Company received an annual
retainer of $11,500, plus $650 for each Board meeting attended and $350 for each
Audit, Compensation, Executive, or Personnel Committee meeting attended. Mr.
Mebane does not receive additional compensation for serving as a director.
The members ofcommittees on which the Audit Committee are Mrs. Biddick, Ms. Millner, and
Messrs. Blaney, Hastings, Mohs, Nevin, Stark, Swanson, and Vondrasek. The Audit
Committee held two meetings during 1998.director served.
The Audit Committee's function is to meet with the Company'sMGE's internal auditors and
independent public accountants and discuss with them the scope and results of
their audits, the Company's
accounting practices, and the adequacy of the Company'sMGE's internal controls.
The Audit Committee also approves services performed by the Company'sMGE's independent public
accountants. The members of the Compensation Committee are Messrs. Blaney, Mohs, and
Stark. The CompensationAudit Committee held one meetingtwo meetings during 1998.1999 and adopted a new
charter in 2000.
The function of the Compensation Committee is to review the salaries, fees,
and other benefits of officers and directors and recommend compensation
adjustments to the Board of
Directors.Board. The members of the ExecutiveCompensation Committee are Mrs. Biddick and Messrs. Blaney,
Mebane, Mohs, and Vondrasek.held two meetings during
1999.
The Executive Committee did not meet during 1998.
The Executive Committee provides a means of taking prompt action when a quorumacts in lieu of the full Board and between meetings
of Directors cannot be readily assembled. When the Board of
Directors is not in session, theBoard. The Executive Committee has the powers of the Board in the
management of the business and affairs of the Company,MGE, except action with respect to
dividends to shareholders, election of principal officers, or the filling of
vacancies on the Board of Directors or committees created by the Board of Directors.Board. The members of the PersonnelExecutive
Committee are Mrs. Biddick, Ms. Millner, and
Messrs. Mebane, Mohs, Swanson, and Vondrasek. The Personnel Committee held one
meetingdid not meet during 1998.1999.
The Personnel Committee makes recommendations with respect to the election
of MGE directors and officers of the Company.officers. Nominations for the Board of Directors by shareholders, which
are submitted to the Chief Executive Officer and/or President of the Company,MGE in the
manner previously described under "Other Information -- Shareholder Proposals for the 2001
Meeting" will be considered by the Personnel Committee, the Board, or the Chief
Executive Officer. Messrs. Stark and Vondrasek will be retiring from the above committees at
the 1999 Annual Meeting.The Personnel Committee held two meetings during 1999.
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PROPOSED AMENDMENT TO BYLAWS TO REQUIRE EMPLOYEE DIRECTORS TO REMAIN
EMPLOYED IN ORDER TO CONTINUE TO HOLD OFFICE
TheDIRECTOR COMPENSATION
In 1999 directors who were not employees of MGE received an annual retainer
of $13,000, plus $800 for each Board of Directors has unanimously approvedmeeting attended and recommended to the
shareholders an amendment (the "Proposed Amendment") to the Company's Bylaws
which reads as follows:
"3.02(b) Qualifications. Each Director who is a full-time employee of the
Corporation$350 for each Audit,
Compensation, Executive, or a subsidiary of the Corporation shall cease to hold officePersonnel Committee meeting attended. Neither Mr.
Mebane nor Mr. Wolter receive additional compensation for serving as a Director upon a termination of employment with the Company and its subsidiaries
for any reason other than retirement with the consent of the Board of Directors
by a resolution adopted by directors constituting not less than 70 percent of
the number of directors of the Corporation fixed by the Board of Directors in
accordance with Section 3.01. Each Director must be a shareholder of the
Corporation. This Section 3.02(b) may be amended or repealed by the shareholders
in accordance with Section 11.01 or by the Board of Directors by a resolution
adopted by directors constituting not less than 70 percent of the number of
directors of the Corporation fixed by the Board of Directors in accordance with
Section 3.01."
DESCRIPTION
Currently, the only qualification that the Bylaws impose on directors is
that a director must be a shareholder of the Company. If the Proposed Amendment
is approved, a second qualification will be added: a director who is a full-time
employee of the Company must relinquish his or her position as director when
that employment ceases for any reason unless, after a cessation of employment by
reason of retirement, 70 percent of the Board approves his or her retention in
office.
The Board believes that the proposed director qualification requirement is
in the best interest of the Company and its shareholders because it promotes the
efficiency and continuity of the operations of the Board in the event that an
employee director is terminated or otherwise leaves the Company. If, however, a
director's employment with the Company ceases by reason of retirement, the
proposed director qualification requirement would enable the Board to weigh the
merits of retaining that director against any possible disruption on the Board.
The Proposed Amendment also provides that the Board may amend or repeal
this provision only if 70 percent of the Board agrees to do so. Generally, the
Bylaws permit Board amendment or repeal of any provision by a simple majority
vote. The supermajority voting requirement of the Proposed Amendment is designed
to ensure that the full force and effect of the proposed director qualification
requirement is not diluted by the general Bylaw amendment provision. Since a 70
percent vote is required for the Board to approve the retention of a retiring
employee as a director, the same vote should be required to amend or repeal the
provision altogether.
REQUIRED VOTE
The vote of shares cast in favor of the Proposed Amendment must exceed the
votes cast against it in order to approve the Proposed Amendment.
THE BOARD RECOMMENDS VOTES "FOR" THE PROPOSED AMENDMENT TO THE BYLAWS.
7
12director.
EXECUTIVE COMPENSATION
The following table summarizes the compensation for 1996, 1997, 1998, and 19981999 of
the Chief Executive Officer and four other executive officers serving as
executive officers on December 31, 1998,1999, whose salary exceeded $100,000 for
1998.1999.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCKRESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDSSTOCK OPTIONS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($AWARDS($) (#) ($) ($)(3)(6)
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
David C. Mebane..........Mebane(1)....... 1999 337,036 17,500 0 0 0 0 10,892
Chairman of the Board 1998 303,736 14,000 0 0 0 0 8,226
Chairman, President, 1997 287,316 0 0 0 0 0 8,857
and Chief Executive 1996 270,756Gary J. Wolter(2)........ 1999 219,780 17,500 0 0 0 0 0 12,263
Officer
Gary J. Wolter...........8,677
President and 1998 192,356 14,000 0 0 0 0 7,584
Senior Vice President -Chief Executive Officer 1997 176,612 0 0 0 0 0 6,171
Administration and 1996 160,516Mark C. Williamson(3).... 1999 219,604 17,500 0 0 0 0 0 4,412
Secretary
Mark C. Williamson.......8,733
Executive Vice 1998 191,528 14,000 0 0 0 0 8,325
Senior Vice President
-and Chief Strategic 1997 174,984 0 0 0 0 0 3,114
Energy Services 1996 158,092Officer
Thomas R. Krull(4)....... 1999 149,332 15,000 0 0 0 0 0 395
Thomas R. Krull(1).......4,268
Group Vice President 1998 131,204 12,000 0 0 0 0 3,981
Vice President - Gas 1997 120,764 0 0 0 0 0 2,736
and Electric Operations 1996 114,612Terry A. Hanson(5)....... 1999 148,776 15,000 0 0 0 0 0 1,742
Terry A. Hanson(2).......6,632
Vice President -- 1998 130,260 12,000 0 0 0 0 6,450
Vice President -Finance 1997 122,416 0 0 0 0 0 5,089
Finance 1996 114,068 0 0 0 0 0 3,8365,089
- -------------------------
(1) Chairman, President and Chief Executive Officer until February 1, 2000.
(2) Senior Vice President-Electric TransmissionPresident -- Administration and DistributionSecretary until February 1,
2000, when he was promoted to President and Chief Executive Officer.
(3) Senior Vice President -- Energy Services until February 1, 2000, when he was
promoted to Executive Vice President and Chief Strategic Officer.
(4) Vice President -- Gas and Electric Operations until February 1, 2000, when
he was promoted to Group Vice President.
(5) Vice President and Treasurer until November 1, 1997, when he was promoted to
Vice President-Gas and Electric Operations.
(2) Treasurer until October 1, 1996, when he was promoted to Vice President and
Treasurer. Promoted to Vice President-Finance on November 1, 1997.
(3)-- Finance.
(6) All other compensation for 19981999 amounts are Companycompany contributions to a
401(k) defined contribution plan, $148 for value attributable to a holiday
gift, and pay for unused vacation. The 401(k) Companycompany contribution for 19981999
was $4,800 for Mr. Mebane, $4,032$4,734 for Mr. Wolter, $4,800 for Mr. Williamson,
$3,936$4,120 for Mr. Krull, and $3,981$3,938 for Mr. Hanson; the residual for each
person in 19981999 was pay for unused vacation for each officer, except Mr.
Krull.
87
1312
AGREEMENT WITH EXECUTIVE OFFICER
In 1999, Chairman, President and Chief Executive Officer David C. Mebane
indicated an intention to retire from MGE. The Board desired to continue Mr.
Mebane's employment as an officer of MGE and advisor to the Board and senior
management. The Board then entered into a contract with Mr. Mebane. The
agreement provides for him to continue as an employee and serve as Chairman of
the MGE Board, consultant and advisor to the Board and senior management, and
Chairman of the MGE Foundation. Mr. Mebane has agreed to act as Chairman of the
monthly Board meetings and the 2000 Annual Meeting. He will also review and
approve official communications with shareholders and review major operational,
financial, regulatory, public policy, and public affairs activities of MGE and
provide the Board with a monthly assessment of the same. He will be responsible
for corporate governance issues at the Board level. Mr. Mebane is prohibited
from engaging in any other aspect of the gas and electric utility business in
the state of Wisconsin during the term of the contract and for two years
thereafter. The agreement runs from February 1, 2000, through February 1, 2001.
The Chairman will be paid $310,000, plus standard benefits.
REPORT ON EXECUTIVE COMPENSATION
CORPORATE MISSION
The mission of Madison Gas and Electric CompanyMGE is to provide quality gas and electric utility service
to its customers at competitive rates; to meet all customers' gas, electric, and
related energy needs; and to earn a reasonable return for investors. MGE is
committed to maintaining the highest standards of corporate citizenship and fair
treatment for all employees.
COMPENSATION PHILOSOPHY
The principal goal of the Madison Gas and Electric CompanyMGE compensation program is to pay employees,
including executive officers, at levels which are:
- reflectiveReflective of how well the CompanyMGE is achieving its corporate missionmission;
- consistentConsistent with the Company'sMGE's current financial condition, earnings, rates, total
shareholder return, and projected Consumer Price IndexIndex;
- reflectiveReflective of individual performance and experienceexperience;
- competitiveCompetitive in the marketplacemarketplace; and
- administeredAdministered in a fair and consistent manner.
Executive salaries are established within a salary range that reflects
competitive salary levels for similar positions in similar-sized gas and
electric utilities and other Wisconsin utilities. The utilities used for salary
comparison are not the same companies included in the performance graph peer
group in this Proxy Statement.proxy statement. The Upper Midwest combination utilities included
in the performance graph peer group were selected to reflect utilities facing
similar weather and economic conditions. Many of these companies are larger than
MGE with much higher compensation structures.
8
13
When examining compensation peer groups, it was determined more appropriate to
consider similar-sized utilities and other Wisconsin utilities.
The midpoint (or middle) of an executive's salary range is approximately
equal to the median salary level of the surveyed utilities. An executive's
position in the range reflects his or her performance over a period of years in
that position, the executive's experience in that position, and CompanyMGE performance.
Specific individual or Companycompany performance targets are not set. Instead, an
executive's salary within the salary range is determined by subjectively
evaluating the individual's performance and experience and the Company'sMGE's performance.
While MGE's current compensation program has functional adequacy to retain
and fairly compensate the Company's executives, the Compensation Committee and the full Board
review the objectives of the executive compensation program on a continuing
basis. Each year, the Compensation Committee reviews and recommends to the Board
annual salaries, salary grades and ranges, and the overall salary program design
for the Company'sMGE's executives.
9
14
From time to time the Compensation Committee considers awarding bonuses to
the Company'sMGE's executives in the form of cash and/or stock. These bonuses may be made for
extraordinary Companycompany or individual performance, a desire to retain an executive
by making that executive's compensation more competitive, aligning the long-term
interests of executives with shareholders, and other reasons.
EXECUTIVE COMPENSATION
Company performancePerformance factors such as earnings, rates, shareholder return, and other
available financial criteria were used in determining the CEO's and other
executive officers' positions in his or her salary range. Other criteria such as
gas and electric reliability and responsiveness to industry change were also
examined.
InOfficer salaries were set effective May 1, 1999. Among the significant
achievements the Compensation Committee considered in setting the salary of the
CEO and other senior executives were the following: 1998 the Company achieved solid earnings were strong
despite substantially lower gas sales resulting from one of the warmest years on record. A gas
capacity release program generated new revenues, and MGE addressed
electric reliability concerns by takingimplemented a
leadership role indistributed generation program. An 83-MW natural gas peaking plant was
negotiated, sited, and readied for construction. MGE constructed a 17-turbine
wind farm which is the passagelargest east of the Mississippi. MGE also maintained its
strong AA bond rating.
In 1999, MGE's earnings exceeded the budget forecast, despite lower gas
margins because of another warm winter and the higher electric fuel costs
resulting from Columbia Plant outages and higher purchased power costs. MGE was
instrumental in shaping Wisconsin Electricenergy policy through the Governor's
Reliability 2000 Act which will provide fair access for all to the transmission
grid. MGE developed a new gas purchasing incentive program which will allow
shareholders to receive up to $750,000 of 1998 and taking steps to add electric
generation. The Company positioned itself for the future by merging gas and
electric field operations and restructuring its major pipeline contract.
Implementing innovative measures such as a gas margin hedge helpedadditional earnings in 1998, and putting in place gas purchasing incentives provides an opportunity to
increase future earnings and shareholder return.2000. MGE had
the highest ten-year average annual return among the four major Wisconsin
combination utilities.
9
14
A compensation study was performed for the CompanyMGE in 19961999 by aan independent
compensation consultant. The study compared the pay level of key MGE executives
to pay levels of general industry and pay levels of other utilities with
revenues of approximately $250 million. The study showed that pay levels for MGE
executives were generally below the median of salary and incentive compensation
for both general industry and similar-sized utilities. Salary adjustments were
made which moved CompanyMGE executives closer to the market median for their positions.
In May of 1998,1999, the CEO's annual salary was set at $309,108$330,000.
A stock and cash bonus was granted to MGE officers based on 19981999
performance. The bonus granted to the CEO and several other senior officers was
$14,000.$17,500. When determining whether to grant the bonus, the Compensation Committee
in particular considered the performance factors noted above, together with the
further alignment of the long-term interests of the executive officers and
shareholders created by the stock portion of the bonus.
Jean M. Biddick
Richard E. Blaney
Frederic E. Mohs
Phillip C. Stark
10
15
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, S&P 500,MGE, Russell 2000, and a Peer Group Industry Index, and the EEI Index
weighted according to each company's market capitalization as of the beginning
of each year.
MADISON GAS AND ELECTRIC COMPANY
FINANCIAL PERFORMANCE
CUMULATIVE FIVE-YEAR TOTAL RETURN COMPARISON
PERFORMANCE GRAPH
1998
MGE - $135
S&P 500 - $294
Russell 2000 - $179
Peer Group - $182[PERFORMANCE GRAPH]
MGE S&P 500 RUSSELL 2000 PEER GROUP EEI INDEX
--- ------- ------------ ---------- ---------
'1993'1994 100.00 100.00 100.00 100.00
'1994' 102.00 101.00 98.00 95.00
'1995' 116.00 139.001995 114.00 127.00 127.00 131.00
1996 105.00 155.00 141.00 133.00
1997 126.00 124.00
'1996' 107.00 171.00 147.00 128.00
'1997' 129.00 229.00 180.00 166.00
'1998' 135.00 294.00 179.00 182.00204.00 191.00 169.00
1998 132.00 191.00 206.00 192.00
1999 125.00 188.00 204.00 157.00
Assumes $100 invested on December 31, 1993,12/31/94 in each of the Company's Common
Stock, S&P 500,MGE's common stock, Russell 2000,
the Industry Peer Group, and the Peer Group.
*TotalEEI Index.
Total return assumes reinvestment of dividends
---------------------------------------
S&P RUSSELL PEER EEI
MGE 500 2000 GROUP ----------------------------------INDEX
---------------------------------------
19931994 $100 $100 $100 $100
1994 $102 $101 $ 98100
1995 $114 $127 $127 $ 95
1995 $116 $139131
1996 $105 $155 $141 $ 133
1997 $126 $124
1996 $107 $171 $147 $128
1997 $129 $229 $180 $166$204 $191 $ 169
1998 $135 $294 $179 $182$132 $191 $206 $ 192
1999 $125 $188 $204 $ 157
The CompanyMGE has decided to use the Russell 2000EEI Index for the broad equity marketindustry index comparison.
Given the Company's market capitalization relative to the
companies includedmergers in the S&P 500electric utility industry, the original peer group
has substantially changed and the Russell 2000, the CompanyMGE believes the
Russell 2000 companies are a more representative investment alternative than the
S&P 500 companies.
11
16standard industry index will
provide a better comparison.
The Peer Group selected by the Company is composed of 1913 Upper Midwest
combination utilities:
Cilcorp Inc. MidAmerican Energy Holding
CinergyAES Corp. Minnesota Power & Light
Cipsco Inc. Nipsco Industries Inc.
CMS Energy Corp. Northern States Power-MN
DPL Inc. SIGCORP. Inc.
IES Industries Inc. St. Joseph Light & Power
Illinova Corp. Utilicorp United Inc.
*Interstate Energy Corp. Wisconsin Energy Corp.
Interstate Power Co. WPS Resources Corp.
**Iowa-Illinois Gas &
Elec.
*WPL Holdings merged with IES Industries and Interstate Power, which
formed Interstate Energy, which later changed its name to
Alliant Energy Corp.
**Merged with MidwestCMS Energy Corp.
DPL Inc. St.
Illinova Corp.
MidAmerican Energy Holding
Minnesota Power & Light
Northern States Power-MN
SIGCORP Inc.
Joseph Light & Power
Utilicorp United Inc.
Wisconsin Energy Corp.
WPS Resources on 7/17/95
12Corp.
11
1716
MADISON GAS AND ELECTRIC COMPANY
FINANCIAL PERFORMANCE
MGE VERSUS WISCONSIN PEER GROUP
Note: This graph is for comparison purposes only. It is to show how the
Company's Five-Year Total Return compares to the other Wisconsin utilities.
PERFORMANCE GRAPH
1998
MGE = $135
Wisconsin
Peer Group = $146[PERFORMANCE GRAPH]
MGE WI PEER GROUP
--- -------------
'1993'1994 100.00 100.00
'1994' 102.00 95.00
'1995'1995 114.00 125.00
1996 105.00 116.00
118.00
'1996' 107.00 110.00
'1997' 129.00 130.00
'1998' 135.00 146.001997 126.00 138.00
1998 132.00 154.00
1999 125.00 117.00
Assumes $100 invested on December 31, 1993,1994, in each of the Company's Common
StockMGE's common stock
and the
Wisconsin Utility Peer Group AverageAverage.
The Wisconsin Peer Group average is weighted based on market capitalization at
the beginning of eachthe year.
*
Total return assumes reinvestment of dividends
-------------------
WI
MGE PEER
GROUP
-------------------
19931994 $100 $100
1994 $102 $ 95
1995 $114 $125
1996 $105 $116
$118
1996 $107 $110
1997 $129 $130$126 $138
1998 $135 $146$132 $154
1999 $125 $117
Wisconsin Peer Group: Wisconsin Energy Corp.
InterstateAlliant Energy Corp.
WPS Resources Corp.
* WPL Holdings merged with IES Industries,
and Interstate Power, which formed Interstate Energy;
which interchanged its name to Alliant Energy Corp.
1312
1817
PENSION PLAN AND SUPPLEMENTAL RETIREMENT PLAN
The CompanyMGE has a noncontributory qualified defined benefit Pension Planpension plan covering
its salaried employees. The amount of pension is based upon years of service and
finalhigh 60-month average earnings in the ten years prior to retirement.
The following table indicates the estimated maximum retirement benefits
payable (unreduced for survivor protection) at the normal retirement age of 65
for specified compensation and years of service classifications. Substantially
all compensation shown in the salary column of the summary compensation table is
included in compensation under the Pension Plan,pension plan, subject to any statutory
regulations imposed by the Internal Revenue Code. Information in this table is
based on the Pension Planpension plan formula for years of service credit earned in 1986 and
subsequent years. The retirement benefits are not subject to any reduction for
Social Security benefits received by the employees or for any other offset
amounts.
PENSION PLAN TABLE(1)
ANNUAL PENSION AT NORMAL RETIREMENT AGE OF 65
AFTER YEARS OF SERVICE INDICATED BELOW(2)
----------------------------------------------------------------------------------------------------------------
FINAL FIVE-YEAR 2530 YEARS
AVERAGE ANNUAL SALARY 10 YEARS 15 YEARS 20 YEARS 25 YEARS OR MORE
- --------------------- -------- -------- -------- -------- --------
$100,000.............. $12,500 $18,750 $25,000 $31,250
$125,000.............. $15,625 $23,438 $31,250 $39,063
$160,000.............. $20,000 $30,000 $40,000 $50,000$14,000 $21,000 $28,000 $35,000 $42,000
$140,000.............. $19,600 $29,400 $39,200 $49,000 $58,800
$170,000.............. $23,800 $35,700 $47,600 $59,500 $71,400
- -------------------------
(1) The retirement benefits reflect limits imposed by the Internal Revenue Code
on benefit amounts and covered compensation.
(2) The Pension Plan Tablepension plan table does not reflect service credit prior to 1986 when
the Pension Planpension plan required employee contributions. The normal retirement
pension for employees with service credits prior to 1986 will exceed the
amounts shown in the Pension Plan Table,pension plan table, depending on their years of
pre-
1986pre-1986 service and contributions made to the Pension Plan.pension plan.
The estimated annual retirement benefit payable at normal retirement age of
65 under the Pension Planpension plan formula (assuming continuation of 19981999 compensation
levels through retirement and taking into account employee contributions and
service credits for 1985 and prior years) is $57,380 to Mr. Mebane, $49,845$77,187 to Mr. Wolter, $51,025$72,940 to
Mr. Williamson, $66,837$86,946 to Mr. Krull, and $48,042$62,232 to Mr. Hanson. At December 31,
1999, the annual retirement benefit payable to Mr. Mebane is $64,985.
The full credited years of service under the Pension Planpension plan are 2223 for Mr.
Mebane, 1516 for Mr. Wolter, 1314 for Mr. Williamson, 2526 for Mr. Krull, and 1718 for
Mr. Hanson.
Officers of the CompanyMGE are also covered under a nonqualified supplemental
retirement plan which provides a supplemental retirement benefit. The
supplemental retirement benefit is a designated percentage ranging from 55 to 70
percent of the final 60-month average earnings less the benefit payable from the
Pension Planpension plan described above. The designated percentage is based on the
officer's age at retirement. The estimated supplemental annual retirement
benefit payable at normal retirement age of 65 under the supplemental retirement
plan (assuming continuation of 19981999 compensation levels
13
18
through retirement) is $135,472$97,819 to Mr. Mebane, $88,293 to
14
19
Mr. Wolter, $86,743$81,066 to Mr. Williamson, $26,344$16,029
to Mr. Krull, and $44,610$35,057 to Mr. Hanson. At December 31, 1999, the annual
supplemental retirement benefit payable to Mr. Mebane was $140,961.
DEFERRED COMPENSATION PLAN
Officers of the CompanyMGE are permitted to defer a portion of their current salary
under a nonqualified deferred compensation plan initiated in 1984. TwoThree
officers contributed to the plan during 1998.1999. Participants in the plan are
entitled to receive deferred compensation upon termination of active employment.
Deferred compensation under this plan does not constitute compensation as
defined under the Pension Planpension plan described above.
The CompanyMGE has entered into a trust agreement for the purpose of assuring the
payment of the Company'sits obligations under the supplemental retirement plan and deferred
compensation plan. Under the trust agreement, in the event of a change in
control or potential change in control of the Company, the CompanyMGE, MGE will be obligated to deliver
to the trustee cash or marketable securities having a value equal to the present
value of the amounts which the CompanyMGE is obligated to pay under such plans and the
costs of maintaining the trust. "Change in control" is defined generally as the
acquisition by any person, subject to certain exceptions, of beneficial
ownership of 20 percent or more of the Common
Stock;common stock; a change in the majority of
the Board of Directors; certain mergers or similar transactions involving the Company'sMGE's
assets where, among other conditions, the current shareholders do not constitute
at least 60 percent of the shareholders of the resulting or acquiring entity; or
a liquidation of the
Company.MGE.
SEVERANCE PLANS
The CompanyMGE has entered into severance agreements with certain key employees,
including Messrs. Mebane, Wolter, Williamson, Krull, and Hanson. Under these
agreements, each such employee is entitled to a severance payment following a
change in control of the CompanyMGE as defined above if, within 24 months after such change
in control, employment with the CompanyMGE is terminated by (i) the Company,MGE, (ii) the employee for
good reason, or (iii) the employee for any reason during the 30-day period
commencing one year after the date of change in control. Each agreement has a
three-year initial term, but on the first anniversary of execution and each
anniversary thereafter, the agreement is extended for an additional year, unless
either the CompanyMGE or the employee gives notice not to extend the agreement or a change
in control of the CompanyMGE has occurred. Severance payments will be equal to three times
the employee's annual base salary plus three times the highest bonus paid during
any of the five years preceding a change in control. If the employee receives
severance benefits following a change in control, health, life, and disability
benefits are continued for up to three years, and the employee will also be
grossed up for any excise taxes the employee may incur. In circumstances not
involving a change in control of the Company,MGE, Messrs. Mebane, Wolter, Williamson, Krull,
and Hanson, like other salaried employees, are entitled under the Company'sMGE's general
severance plan to a payment
1514
2019
equal to two weeks of compensation plus the employee's weekly compensation
multiplied by the number of years of employment, not exceeding 24.
OTHER INFORMATION
EXPENSES OF SOLICITATION
OF PROXIES
TheMGE will bear the cost of soliciting proxies for the annual meeting.
Proxies will be borne by the Company. In addition to
solicitationsolicited by mail and may be solicited personally by directors,
officers, andor employees of the Company may
solicit proxies from the shareholders of the Company personally or by telephone.
The CompanyMGE who will not receive special compensation for such
services. MGE has retained Morrow & Co., Inc., to aid in the solicitation ofsolicit proxies at a fee of
$6,000 plus expenses.
SHAREHOLDER PROPOSALS AND
NOMINATIONS FOR NEXTTHE 2001 ANNUAL MEETING
In order to be considered for inclusion in the Company'sMGE's proxy materials for the
2000 Annual Meeting,2001 annual meeting, a shareholder proposal must be received by the
CompanyMGE no later
than November 25, 1999.December 1, 2000. In addition, regardless of whethereven if a shareholder proposal is set forth
in the Company's 1999 Proxy StatementMGE's 2000 proxy statement as a matter to be considered by shareholders,
the Company'sMGE's Bylaws establish an advance notice procedure for shareholder proposals to
be brought before any meeting of shareholders, including proposed nominations of
persons for election to the Board of Directors. Shareholders at the 1999 Annual Meeting2000 annual
meeting may consider a proposal or nomination brought by a shareholder of record
on March 1, 1999,2000, who is entitled to vote at the 1999 Annual Meeting2000 annual meeting and who has
given the CompanyMGE timely written notice, in proper form, of the shareholder's proposal
or nomination. A shareholder proposal or nomination intended to be brought
before the 1999 Annual Meeting2000 annual meeting must have been received by the Company after the close
of business on January 25, 1999, and prior to the close of business on February
19, 1999. The Company did not receive notice of any shareholder proposal or
nomination relating to the 1999 Annual Meeting. The 2000 Annual Meeting is
expected to be held on May 9, 2000. A shareholder proposal or nomination
intended to be brought before the 2000 Annual Meeting must be received by the
CompanyMGE after the close of
business on January 24, 2000, and prior to the close of business on February 18,
2000. MGE did not receive notice of any shareholder proposal or nomination
relating to the 2000 annual meeting. The 2001 annual meeting is expected to be
held on May 15, 2001. A shareholder proposal or nomination intended to be
brought before the 2001 annual meeting must be received by MGE after the close
of business on January 29, 2001, and prior to the close of business on February
22, 2001. All proposals and nominations should be directed to the Company'sMGE's principal
executive offices at 133 South Blair Street, Post Office Box 1231, Madison,
Wisconsin 53701-1231, Attention: Corporate Secretary.
15
20
OTHER MATTERS
The Company'sOur Annual Report for the year 19981999 has been mailed to shareholders.
The management has no knowledgeBoard does not know of any other matters tothat will be brought beforepresented at the
Annual Meeting.annual meeting. If however, any other matters properly come before the Annual Meeting,meeting, it is the
intention of the persons named in the proxy to vote the proxies in accordance
with their judgment on such matters.
The Board of Directors has selected PricewaterhouseCoopers LLP to audit the consolidated
financial statements of the CompanyMGE and its subsidiaries for 1999.
16
212000.
PricewaterhouseCoopers LLP, the Company'sMGE's independent public accountant in 1998,1999, is
expected to have a representative present at the 2000 annual meeting who may
make a statement and will be available to respond to appropriate questions.
Madison Gas and Electric Company
DAVIDMADISON GAS AND ELECTRIC COMPANY
[DAVID C. MEBANEMEBANE]
DAVID C. MEBANE
Chairman of the Board
[GARY J. WOLTER]
GARY J. WOLTER
President and
Chief Executive Officer
Dated March 24, 1999
1731, 2000
16
21
If you plan to attend the meeting in person, please fill out the
reservation form and return it with your proxy card so that we may have an
indication of the number of shareholders planning to attend the meeting.
If you have any questions, please feel free to call our Shareholder
Services toll-free number. Call 1-800-356-6423 if you are calling from within
the Continental United States and 252-4744 if calling from the Madison area.
Map
Note: Enter the Dane County Expo Center grounds through the Main Gate off of
Rimrock Road (see inset map).
22
MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
[MG&E LOGO]
This proxy is solicited on behalf of the Board of Directors of Madison Gas and
Electric Company. MGE's Annual Meeting will be held at 11:00 a.m., local time,
on Tuesday, May 4, 1999,9, 2000, in the Exhibition Hall at the Dane County Exposition
Center, 1919 Expo Way, Madison, Wisconsin (see map on back).
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ATTACHED PROXY PROMPTLY AND
MAIL IT BACK TO US EVEN IF YOU PLAN TO ATTEND THE MEETING. If you do plan on
attending the meeting, be sure to complete and return the bottom two-thirds of
this form in the enclosed envelope.
Fold and Detach Here Fold and Detach Here
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PLEASE
SIGN
AND
RETURN
MADISON GAS AND ELECTRIC COMPANY PROXY
ITEM 1: Election of Directors: Class III Nominees: Jean Manchester
Biddick, David C. Mebane,John R. Nevin,
H. Lee Swanson, and Regina M. MillnerGary J. Wolter
[ ] FOR [ ] WITHHOLD
all nominees listed above authority to vote for all
(except as marked to the allnominees listed
contrary below) nominees listed
To withhold authority to vote
for any individual nominee,
write that nominee's name here:
--------------------------------
ITEM 2: Proposal to Amend Bylaws to Require any Employee
Director to Remain Employed Full-Time in Order to Continue
Service as a Director [ ] FOR [ ] AGAINST [ ] ABSTAIN
ITEM 3: In their discretion upon such other business as may
properly come before the Meetingmeeting
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED
WITH RESPECT TO PROPOSALS NUMBEREDPROPOSAL NUMBER (1) AND (2). IF NO SPECIFICATION IS
MADE, THE SHARES WILL BE VOTED "FOR ALL NOMINEES" AND "FOR" THE PROPOSAL TO AMEND THE COMPANY'S BYLAWSNOMINEES."
This proxy revokes any proxy heretofore given. ----------------------------------------------------
--------------------------------------------------- , ----------------------------------------------------
19992000
MONTH DAY Please sign exactly as name appears hereon. For
joint accounts, all tenants should sign. Executors,
Administrators, Trustees, etc., should so indicate
when signing.
(continued on reverse side)
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19992000 ANNUAL SHAREHOLDER MEETING RESERVATION
PLEASE SIGN AND RETURN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING. ------------------------------------------------------------
(IF YOU DO NOT PLAN TO ATTEND, DO NOT RETURN THIS PORTION OF Shareholder(s)
THE FORM.) ------------------------------------------------------------
Shareholder(s)
------------------------------------------------------------
Guest
23
MAP[MAP]
PROXY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 4, 19999, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
[MG&E LOGO]
The aforesigned Common Stock shareholder of MADISON GAS AND ELECTRIC
COMPANY hereby appointsI (we) appoint(s) RICHARD E. BLANEY, DAVID C. MEBANE, and FREDERIC E.
MOHS, as proxies with power of substitution, to represent and to vote all
shares of stock the aforesignedI (we) would be entitled to vote at the Annual Meeting to
be held in the Exhibition Hall of the Dane County Exposition Center, 1919
Expo Way, Madison, Wisconsin, on Tuesday, May 4,
1999,9, 2000, at 11:00 a.m.,
local time, and at all adjournments thereof.
Shares represented by all properly executed proxies will be voted in
accordance with instructions appearing on the proxy. IN THE ABSENCE OF
SPECIFIC INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS AND IN THE DISCRETION OF THE
PROXY HOLDERS AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
ANNUAL MEETING.
PLEASE SIGN EXACTLY AS NAME(S) APPEAR ON THIS PROXY CARD AND DATE THIS
PROXY. IF JOINT ACCOUNT, EACH JOINT OWNER SHOULD SIGN. IF SIGNING FOR A
CORPORATION OR PARTNERSHIP OR AS AGENT, ATTORNEY, OR FIDUCIARY, INDICATE
THE CAPACITY IN WHICH YOU ARE SIGNING.